Arbitrator: Marc Randazza must pay $600K+ for “clear and serious breaches of fiduciary duty” against his former client

Today I was tipped about an interim arbitration award of more than $600,000 against attorney Mark John Randazza of Las Vegas. This amount was awarded to his former employer, a gay pornography studio Corbin Fisher/Liberty Media, in a civil dispute surrounding Randazza’s August 2012 scandalous departure from this company, where he was employed as an in-house general counsel for three years¹.

The June 3, 2015 judgment was written by a former magistrate judge and currently a JAMS arbitrator Stephen E. Haberfeld. The arbitrator determined that Randazza had violated his fiduciary duties owed to the studio as its attorney and employee, committed numerous ethical violations, breached his employment contract, and caused it hundreds of thousands of dollars in damages over the course of his employment.

Those violations include an attempt to secure for himself a $75,000 bribe from an opposing party in a copyright infringement litigation (Liberty Media v. Oron), spoliation of evidence, representing potentially adversary clients (tube sites that infringe upon Liberty Media’s content) in violation of the employment contract, taking control of client funds in his trust account, and so on.

Randazza is regarded as a hero by many respected and honest people, primarily for his First Amendment work (for example, instrumenting the best anti-SLAPP law in the country). However, if you purport to do noble work, you don’t do it with your hands that dirty. Otherwise you let your allies down the big way by giving fatal ammunition to the foes.

On 6/15/2015 the studios filed a petition to confirm arbitration award in the Clark County Court in Las Vegas (search by party “Randazza” or case # A-15-719901-C). This court, like the majority of other local courts, doesn’t provide online access to documents. According to the case page, Randazza represents himself while the plaintiffs are represented by Wendy Krincek. The hearing on plantiffs’ and defendant’s motions is set to 7/23/2015.

Coverage

Interestingly, the following two paragraphs were promptly deleted and not a part of the original XBiz article anymore:

“[P]art of his settlement offer was to pay us $20,000 per bar license he is able to keep from having suspended/disbarred,” [Corbin Fisher’s vice president of business development Brian] Dunlap, said. “In other words, he offered us a bounty on his bar licenses — we’d get more of the award if we did not cooperate with bar investigators or send follow-up complaints.

“In his attorneys own words, they said they expect suspension/disbarment in [Florida], so we could expect $80,000 if none of the other four bars took action. We refused this offer because it was insulting, it was unethical — an attorney cannot offer such a bounty on their license — and because we know most all bars use reciprocal discipline — if one suspends/disbars, the others usually do as well.”

2/1-2/3/2016 Update: I received a DMCA notice from XBiz today for the pdf of the original article. Looks like Randazza is abusing copyright law once again, but this time as a censorship tool. Not wise. Although, after the amazing WordPress/Automattic legal department’s involvement, XBiz/Randazza withdrew the demand, I decided not to reinstate the pdf in question: the point was not the entire article, but the deleted paragraphs, which are already preserved for posterity here:

Also, the title of the original article was “Corbin Fisher Awarded $600K; Randazza to Challenge Interim Arbitration Decision.” Now the site shows only “Corbin Fisher Awarded $600K.”

Updates

7/23/2015

For some unexplained reason (a typo in the docket text?) the hearing in the Clark County Court in Las Vegas initially scheduled for today took place on 7/9/2015 at 9:00 am, so this update is a bit overdue. Attorneys attended: for the plaintiff — Wendy Krincek and Ethan D. Thomas; for the defendant — Michael K. Wall (a partner in a law firm where current Nevada Lieutenant Governor Mark Hutchinson is also a partner).

Apparently, Judge Jim Crockett doesn’t want this case to linger, he set a tight motion schedule despite defense’s objections, according to the hearing minutes:

Court reviewed the Contract between Mr. Randazza and Plaintiff and can see an agreement to Binding Arbitration. In fact, this is one of the things the parties agreed to. Ms. Krincek concurred. Mr. Wall objected for the record. Court stated this dispute is subject to Binding Arbitration and inquired of counsel if an Arbitration has taken place. Ms. Krincek stated not to her knowledge. Mr. Wall informed the Court that there was an Arbitration. Ms. Krincek stated she is here for attorney’s fees and costs, and believes the Arbitrator was going to award something for spoliation of evidence. Court stated there was back and forth discussions whether Mr. Randazza has performed some or many of the obligations that the Arbitrator ordered him to do. Court stated that would be impossible for this Court to determine from it has seen in the documents. Court queried counsel whether there has been compliance and what remains to be resolved in this case.

Court queried Mr. Wall if Mr. Randazza or he give the Court insight on what his expected challenges or objections to the Arbitration decision are. Mr. Wall stated he recently received this from this client. There is factual evidence that it will show there will be challenges to the determination themselves and understands the difficulty of the situation. He feels there have been legal Arbitration in California and may have jurisdictional challenges. They have statutory time to look into those challenges and requested time to file an Opposition as the Statute allows. Court queried counsel if California counsel is not willing to cooperate with Mr. Wall. Mr. Wall stated he is cooperating and will provide documents and act as co-counsel to the deft.

COURT ORDERED, Mr. Wall to file his brief as to why Binding Arbitration is flawed legally or jurisdictionally within 30 days of today’s date by 8/10/15. Mr. Wall objected and argued that he has 90 days pursuant to Supreme Court and the District Court does not have authority to change the 90 days. Further, his client is out of the country until after 8/10/15, requesting at a bare minimum exactly what the Statute guarantees them pursuant to Nevada Supreme Court and that is until 9/1/15 to file the document requested by the Court. Ms. Krincek objected and requested Defendant’s opposing brief to the Motion to Confirm Arbitration Award be filed in 30 days. Further argument by Mr. Wall in opposition to this Court changing the time period in which to file an opposing brief.

The Court disagrees with Mr. Wall and ORDERED, defendant’s opposition to be filed in 30 days by 8/10/15. FURTHER ORDERED, Plaintiff will have two weeks to file a Reply brief by 8/24/15, and the motion is CONTINUED to 9/3/15. Mr. Wall stated he will file his opposition, but will be filing his motion to set aside or correct the award by 9/1/15. Upon inquiry by Mr. Wall, COURT ORDERED, if Mr. Wall if going to file a Motion to Set Aside or Vacate the Award it is to be filed by 8/10/15. 9/3/15 @ 9:00 A.M. PLTF’S MOTION TO CONFIRM ARBITRATION AWARD…DEFENDANT’S MOTION TO SET ASIDE OR VACATE ARBITRATION AWARD.

9/4/2015

On 8/28/2015 Marc Randazza filed a Chapter 11 bankruptcy petition. He listed 1-10 million as estimated assets and 10-50 million as estimated liabilities (that’s why Chapter 13 is not an option). As a result, the Clark County case (a petition to confirm the arbitration award) was automatically stayed / administratively closed. This situation is tricky: Randazza essentially declared that the arbitration is so burdensome that bankruptcy is the only choice. However, he implied it before the said arbitration was finalized, and the bankruptcy is seemingly aimed at preventing the finalization. So expect Liberty to continue pushing for the final arbitration decision (moving to resume the closed case).

9/30/2015

As I predicted, Liberty/Excelsior moved to modify the automatic stay so the arbitration would be finalized:

Creditors Excelsior Media Corp. and Liberty Media Holdings, LLC (“E/L”) hereby move for an order modifying the automatic stay to allow the completion of the pending pre-petition arbitration between E/L and Debtor through the confirmation of all awards to a judgment entered by the Nevada State Court. That judgment will then be filed as a claim against Debtor and E/L will seek an order determining the judgment to be non-dischargeable.

8/2/2015

As you noticed, I don’t actively follow this dispute, yet once in a while I check the docket. One recent filing deserves an update: on 7/7/2016, Liberty filed its second amended complaint. It reiterates the creditor’s previous claims, particularly asking for

[…]a decree determining that all debts determined to be owing by Defendant to Plaintiffs which are the subject of this action are deemed and adjudicated to be non-dischargeable […]

The complaint corroborates previous accusations in attorney’s unethical conduct, and makes new ones.

9/3/2016

¹ The arbitration was triggered by the employment agreement (reportedly drafted by Randazza): it had a provision that in a case of a dispute parties must submit themselves to arbitration by JAMS. It was Randazza who demanded arbitration after his August 2012 resignation — that’s why he was listed as the claimant. It took unusually long — 2.5 years, and an unusually meticulous arbitrator was drawn.

The order says Randazza is to pay his former client $275,000 for violating the terms of the Oron settlement agreement (plus 2.5 years of 10% interest), on top of the $275,000 he was unlawfully holding in his client trust account (plus 2.5 years of 10% interest). If my math is right, that brings the total awarded to his former clients to nearly $1 million. It appears that the judge also invited them to file a motion for attorney fees and costs and he hasn’t awarded anything for the spoliation of evidence yet.

I didn’t see where the trust account held 275k. It seems E/L spent that amount on another lawyer to re-settle the Oron legislation.

Para 5 says that MR has to pay for an “accounting” – but think forensic audit – of the client trust account.

We’re just six weeks shy of three years, at 10%/year – that’s something like 31%, if my math is correct, for all parts of the awards that merit legal interest.

$3500 for the forensic analysis of the second as-yet-unreturned laptop

E/L’s attorney fees for the Arbitration. There were five full days of testimony in front of the arbitrator. Wild-assed guess fee of $400/hr * 8 hrs * 5 days = $16k, just for the hearings. I imagine the total fees will be about $50k.

Total 580,500.00 94,804.17 675,304.17
NOTE: does not include ORON funds held in trust account

I come up with $675,304.17. And, no, I didn’t get very finicky with the interest calculations. The biggest question I have is the construction of paragraph 2–it seems to imply that the $275k includes the 60k and the 3k for the forensics on the first of two laptops.

Sad, though. He’s going to be liable for more, too, as soon as E/L figures out how much damages he caused them for the post-employment violations of fiduciary duty. Wiping the laptop meant they may have had to recreate litigation in other cases, not just the Oron one–potentially jacking up the amount owed significantly.

Well, this brings back memories. I was a party to the 441 Does suit that they brought against people back in July 2012 for alleged infringement that took place in February 2012. I lost 10 pounds in the next month and lost countless hours of sleep. Rushie was the local counsel and after that suit he said he didn’t want to be on the side of Plaintiff’s anymore in copyright suits. I actually had some respect for him after that. How low he’s sunk in three year’s time. The good news is the statute of limitations has expired on that suit. They never did re-file after it was moved to federal court. I wonder if that has anything to do with the fact that Randazza was gone by then and took case files with him. I wonder if Liberty ever saw any of the settlements funds of the people that did settle. Guilty or not, people don’t want to be associated with gay porn. Sad fact is Randazza probably still won’t be disbarred. Rushie’s running around filing suits on companies that have been voluntarily dissolved and is out to ruin people’s lives financially over $20 movies. Sadly, I’ve gained back those 10 pounds and 25 more.

All these lawyers are friends with each other, following each other on Twitter and gushing over one another on their blogs. Rushie is listed as one of Randazza’s law firms attorneys on his website.

But as for the torrent suits, it does make you wonder. $550,000 in his trust account when he left his employer? The award mentions tens of thousands more ($30,000 of other funds in the trust account, $60,000 Randazza got from Righthaven), and mentions over and over again that Randazza was doing tons of work for various other people without Liberty knowing. It talks about the Oron bribe ($75,000) and also mentions Megaupload which was a site just like Oron, and mentions TNA (another one?). So you have to wonder about other bribes. Then there’s the XVideos/XNXX which is like the biggest gay porn site on the planet that he took as a client so there’s no telling how much money Randazza made from them. But it seems that was all done without Liberty knowing, so they weren’t getting the money.

Why go after all these John Does?? My guess is Randazza saw all the big sites with the deep pockets and saw dollar signs from them and tried to make all the money he could from them for himself. But he was their lawyer and so had to do something, so sued all the John Does and torrenters for Liberty, while trying to make the big money for himself from the defendants with deep pockets. I mean, could any torrenter pay a $75,000 bribe to him? I doubt it. Sue the little guys for your client, take bribes from the big guys without your client knowing (or become the big guys attorney). Seems legit!

Ken White at Popehat is fairly gushing with his praise for Randazza, but he also tends to be speak stridently against attorneys who demonstrate ethical failure. If Randazza wasn’t his friend this would be the subject of a n interesting blog piece but it probably won’t get mentioned for that reason. Too bad, because hypocritical conduct by attorneys – like that Rrandazza displays here – is conduct of the worst kind.

What many of these attorneys likely don’t realize is they contribute to this kind of unethical behavior by ignoring it or pretending it didn’t take place. If an attorney thinks they can get away with unethical behavior and their peers will turn a blind eye to it, what would otherwise be meaningful disincentive to violate ethics no longer exists.

Really disappointed in Marc Randazza. While I can’t say I saw him as a hero, I did root for him in his defense of the first amendment, and he was supportive of an initiative of mine to defeat a proposed restriction on free speech in a town where I once lived. When a free speech leader gets his hands dirty, it degrades the rest of us free speech advocates.

FYI: The large number or retweets (and most likely Facebook likes — I don’t have a Facebook account, so I can’t check) is done by a botnet of fake Twitter accounts. I have nothing to do with it, I do not condone this way of “SEO”: it is dishonest and counterproductive. I suspect who is behind this “gift,” but without a solid proof I don’t want to make public accusations.

I know. From my own personal experience with Mark Randazza, I can say that he is a very bad person. It’s a shame that there are bad people like him in this world. He has a reputation as a dishonest attorney in Las Vegas.

I am pretty sure Randazza worked something out with a party suing me where Randazza’s client was named a co-defendant. They now advertise together on remove.org which is a scam site directing folks from Attorney Rogelio Garcia’s anti-semetic harassment websites he uses for frivolous lawsuits.

I called Randazza after considering hiring him. He hung up on me immediately when I mentioned Rogelio Garcia. Injury law isn’t as profitable these days so these people want free speech to have a price they collect payment on. They are all charlatans lacking any true talent or a shred of integrity in my opinion and from the acts I have witnessed..

I searched Lumen (formerly Chilling Effects — a database of DMCA and other takedown notices) for “Randazza,” and, somewhat unsurprisingly, found out that Mr. Randazza is not new to abusing copyright law in order to censor unflattering information about him. A couple of examples:

Apparently a parody account used an avatar created from a video frame. Marc didn’t like it. I really doubt that Mr. Randazza rather than Fox is a copyright holder.

This takedown was unsuccessful: the image is still there. Unflattering as it is, it is a clear-cut fair use:

It may very well be that the content is defamatory, but DMCA is not a proper avenue to take that content down. A textbook example of a DMCA abuse.

This one is also a fair (transformative) use. The image description “Photograph of Marc John Randazza wearing the United States flag, holding legal books in his right hand, and pointing towards the viewer with his left hand” suggests that someone edited the said picture by removing a laurel wreath. Obviously.

If you find out any information regarding lawsuits where website ownership is demanded due to defamation allegations please post. Fraudulent attempts were made by Mark Razamatazza’s fellow “reputation lawyer” friends to acquire over ten websites Including websites that were not the defendants in at least one known to me 1st amendment extortion suit.

I can’t wait to see if Ken starts claiming his depression has worsened because of the attacks on Marc. They know they have tried to force others into suicide and what they love doing is claiming to be the victims of exactly what they do. They set out to profit from it. Marc was smart to file for bankruptcy. He came pretty close to being included on a wrongful death claim. I think witness harassing attorney’s who call women “receptacles” and rally others to attack online like a gang of street dogs really should be required to jump off a building. Ken doesn’t have enough character to treat others as he wants them to treat him, whines that he struggles so, wants to be a guru for other self loathing lawyers who are better living through science and coming to a court room soon, he’ll be suing for intentional infliction of emotional distress.

I have had these idiots jerk with my life for the past three years and the buddy they are protecting injured me in an accident in 2009. I am also still upset about my brother’s suicide. I asked them to stop, told them two of my family members were in poor health and they continued to attack, libel and slander more than half my relatives online in fake criminal reports, false pleadings, false CPS reports and false police reports.

Once again I have found myself in a place where I have to laugh or I’ll cry so I am working on forgiving by expressive writing therapies for my own peace and well being.

The latest (April 2016) takedowns are claimed to be from Monica Foster. If it was indeed her, she might have her reasons for that — the same video on her own YouTube channel is still available. It is possible though that she was impersonated, yet if this is the case, I doubt that Randazza was behind it: he didn’t hesitate to put his name on even the most frivolous takedowns in the past.

Based upon a complaint I filed Marc Randazza is facing a disbarment lawsuit filed by the Nevada State Bar on July 25th. Why have you not updated your article to reflect this?

Randazza is an absolute criminal and I will see him disbarred in every single state he has a license. My complaint in Florida was also picked up and they are acting, too. Oh, and FYI – the State of Washington will be holding a hearing on Sept 15 regarding Randazza practicing law in WA without a license.

I think because Mr Randazza isn’t actively trolling consumers, he is a little bit outside SJD’s main interest. There’s also the issue of PACER fees, on which she spends quite a bit, thank you SJD!

It does seem that Mr Randazza didn’t care what his big name was built on, and didn’t quite know when to quit playing loose with the rules.

Mr Retzlaff, I’m not quite sure who you are (I suspect you are with one of Mr Randazza’s former clients) that you can get bar proceedings started like this…I’m only J. Random Citizen myself…but if you want to help, I’m sure SJD has some suggestions.

Not that Keith Lipscomb, John Steele, Paul Hansmeier, and others don’t also do the same..ruin lives for profit…but I don’t think these problem lawyers will get the public attention (and therefore lead to the reforms needed to root out the problem) the same way that action against lawyers for Donald Trump will.